The stock market was volatile on Thursday, declining early, recovering, then declining again. The Dow Jones Industrial Average (DJINDICES:^DJI) was down around 0.3% at 11:30 a.m. EDT.
The U.S. Labor Department reported that another 2.98 million Americans filed unemployment claims in the week ended May 9, worse than expected. Since mid-March, about 36.5 million Americans have filed for unemployment benefits amid the novel coronavirus pandemic.
Cisco Systems (NASDAQ:CSCO) was the Dow's top performer on Thursday, boosted by a quarterly report that wasn't as bad as expected. Meanwhile, shares of 3M (NYSE:MMM) slumped after the company disclosed a double-digit sales decline for April.
Cisco maintains profits
A significant revenue decline was a given for networking hardware giant Cisco in its fiscal third quarter, in light of a downturn in demand that began before the pandemic disrupted the U.S. economy. Cisco's sales were down 8% to $12 billion in the quarter ended April 25, beating analyst estimates by about $130 million.
Unsurprisingly, Cisco's core networking switch and router business was the worst performer during the quarter. Revenue in the infrastructure platforms segment tumbled 15% year over year, as any incremental upgrade activity to deal with increased usage was swamped by customers pulling back on orders. The company also dealt with some supply chain issues.
The applications segment suffered a smaller 5% revenue decline, with soaring demand for video conferencing solutions unable to offset weakness in other areas. Security revenue jumped 6%, and services revenue jumped 5%. Cisco's software business, which spans multiple segments, moved further toward subscriptions during the quarter, with 74% of software revenue coming from subscription offerings.
While revenue was down, Cisco kept the bottom line afloat. Non-GAAP (adjusted) earnings per share came in at $0.79, up 1% from the prior-year period and $0.08 better than analysts were expecting. On a GAAP basis, EPS was down 6%.
Cisco expects a deeper revenue decline in the fiscal fourth quarter. The company guided for an 8.5% to 11.5% drop in sales, along with non-GAAP EPS between $0.72 and $0.74.
Cisco's results were not great in an absolute sense, but the market was expecting worse. Shares of the tech giant were up 5.5% by late Thursday morning as investors digested the company's numbers.
3M reports steep April sales decline
Shares of industrial conglomerate 3M were down 2.4% Thursday morning after the company disclosed sales data for April. The company pulled its full-year guidance last month, but it committed to provide monthly updates until visibility improves.
Total sales were down 11% year over year to $2.3 billion. Excluding acquisitions, divestitures, and currency fluctuations, sales were down 12%. Acquisitions and divestitures raised sales by 3%, while currency reduced sales by 2%.
Organic constant-currency sales were down 3% in the consumer segment, down 7% in the safety and industrial segment, down 10% in the healthcare segment, and down 18% in the transportation and electronics segment. The company continues to see strong demand in some areas, including personal safety, cleaning, and food safety, but significant weakness in others. End markets suffering from sales declines included oral care, automotive OEM, and stationery and office.
Organic constant-currency sales were down in all geographic regions. Sales were up 7% in China, but that growth was unable to offset sales declines elsewhere. In the United States, sales were down 15%. Including Thursday's decline, shares of 3M are now 29% below their 52-week high.